Exhibit 10(c)
1997 EMPLOYEE STOCK OPTION PLAN
OF
CANTEL MEDICAL CORP.
(As amended through March 18, 2010)
1. The Plan. This 1997 Employee Stock Option Plan (the “Plan”) is intended to encourage ownership of stock of Cantel Medical Corp. (the “Corporation”) by specified employees of the Corporation and its subsidiaries and to provide additional incentive for them to promote the success of the business of the Corporation.
2. Stock Subject to the Plan. Subject to the provisions of Paragraph 14 hereof, the total number of shares of Common Stock, par value $.10 per share, of the Corporation (the “Stock”) which may be issued pursuant to Incentive Stock Options (“ISOs”), as defined by Section 422 of the Internal Revenue Code, and non-Incentive Stock Options (“Non-ISOs”) granted under the Plan (the “Options”) shall be 3,750,000. Such shares of Stock may be in whole or in part, either authorized and unissued shares or treasury shares as the Board of Directors of the Corporation (the “Board”) shall from time to time determine. If an Option shall expire or terminate for any reason without having been exercised in full, the unpurchased shares covered thereby shall (unless the Plan shall have been terminated) again be available for Options under the Plan.
3. Administration of the Plan. The Plan shall be administered by a committee (the “Committee”) composed of two or more non-employee members of the Board which shall have plenary authority, in its discretion, to determine the employees of the Corporation and its subsidiaries to whom Options shall be granted (“Optionees”), the nature of the Option (i.e., whether an ISO or non-ISO), the number of shares to be subject to each Option (subject to the provisions of Paragraph 2), the option exercise price (the “Exercise Price”) (subject to the provisions of Paragraph 7), the vesting schedule of each option and the other terms of each Option. The Board shall have plenary authority, subject to the express provisions of the Plan, to interpret the Plan, to prescribe, amend and rescind any rules and regulations relating to the Plan and to take such other action in connection with the Plan as it deems necessary or advisable. The interpretation and construction by the Board of any provisions of the Plan or of any Option granted thereunder shall be final and no member of the Board shall be liable for any action or determination made in good faith with respect to the Plan or any Option granted thereunder by the Committee.
4. Employees Eligible for Options. All employees of the Corporation or its subsidiaries shall be eligible for Options. In making the determination as to employees to whom Options shall be granted and as to the number of shares to be covered by such Options, the Committee shall take into account the duties of the respective employees, their present and potential contributions to the success of the Corporation and such other factors as it shall deem relevant in connection with accomplishing the purpose of the Plan.
5. Term of Plan. The Plan shall terminate on, and no Options shall be granted after, October 15, 2007 provided that the Committee may at any time terminate the Plan prior thereto.
6. Maximum Option Grant. With respect to an Option granted to an individual that is intended to qualify as an ISO, the aggregate fair market value (determined as of the time the Option is granted) of the Stock with respect to which such Option and all other ISOs granted to the individual (whether under this Plan or under any other stock option plan of the Corporation or any of its subsidiaries) become exercisable for the first time in any calendar year may not exceed $100,000.
7. Exercise Price. Each Option shall state the Exercise Price, which shall be, in the case of ISOs, not less than 100% of the fair market value of the Stock on the date of the granting of the Option, nor less than 110% in the case of an ISO granted to an individual who, at the time the Option is granted, is a 10% Holder (as hereinafter defined). The fair market value of shares of Stock shall be determined by the Board and shall be (i) the closing price of the Stock on the date of the granting of the Option as reported by the principal exchange on which the Company’s Stock is traded or any quotation reporting organization, or (ii) if the Stock did not trade on such date, the closing price of the Stock on the first day immediately preceding such date on which the Common Stock traded; provided, however, that with respect to shares of Stock delivered to pay the Exercise Price of an Option under Section 9(a) or the settlement of all or part of an Option under Section 9(b), the fair market value shall be the most recent closing price of the Stock on the largest principal securities exchange listing the Stock immediately prior to the exercise of the Option.
8. Term of Options. The term of each Option granted under this Plan shall be for a maximum of ten years from the date of granting thereof, and a maximum of five years in the case of an ISO granted to a 10% Holder, but may be for a lesser period or be subject to earlier termination as hereinafter provided.
9. Exercise of Options.
(a) An Option may be exercised from time to time as to any part or all of the Stock to which the Optionee shall then be entitled, provided, however, that an Option may not be exercised (a) as to less than 100 shares at any time (or for the remaining shares then purchasable under the Option, if less than 100 shares), (b) prior to the expiration of at least six months from the date of grant except in case of the death or disability of the Optionee or as otherwise approved by the Committee and (c) unless the Optionee shall have been in the continuous employ of the Corporation or its subsidiaries from the date of the granting of the Option to the date of its exercise, except as provided in Paragraphs 12 and 13. The Exercise Price shall be paid in full at the time of the exercise of an Option (i) in cash (by wire transfer or personal, certified or bank check) or (ii) by the transfer to the Corporation of whole shares of its Stock that are already owned by the Optionee with a fair market value determined under Section 7 equal to the purchase price of the Stock issuable upon exercise of such Option (or partly in cash and partly in such Stock); provided, however, that the Corporation shall not be required to deliver (or make available) shares of Stock with respect to which an Option is exercised until the Corporation has confirmed the receipt of good and available funds in payment of the Exercise Price thereof as well as any required tax withholding obligation. In addition to the foregoing,
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payment of the Exercise Price may be made by delivery to the Corporation by the Optionee of an executed exercise form, together with irrevocable instructions to a broker-dealer to sell or margin a sufficient portion of the shares of Stock covered by the Option and deliver the sale or margin loan proceeds directly to the Company (sufficient to pay the Exercise Price and tax withholding obligation). The holder of an Option shall not have any rights as a stockholder with respect to the Stock issuable upon exercise of an Option until certificates for such Stock shall have been delivered to him (or an appropriate book entry registration or electronic issuance has been made by the transfer agent) after the exercise of the Option.
(b) At or after the time of grant of an Option, the Board or the Committee may agree (regardless of the terms set forth in the agreement reflecting such Option grant) to authorize the settlement of all or part of any Option by delivering to the Optionee shares of Stock having a fair market value (determined under Section 7) equal to the product of the excess of the fair market value of one share of Stock (determined under Section 7), over the Option exercise price, multiplied by the number of shares of Stock with respect to which the Optionee proposes to exercise the Option.
10. Non-transferability of Options. An Option shall not be transferable otherwise than by will or the laws of descent and distribution and is exercisable during the lifetime of the employee only by him or his guardian or legal representative.
11. Form of Option. Each Option granted pursuant to the Plan shall be evidenced by an agreement (the “Option Agreement”) which shall clearly identify the status of the Options granted thereunder (i.e., an ISO or Non-ISO) and which shall be in such form as the Committee shall from time to time approve. The Option Agreement shall comply in all respects with the terms and conditions of the Plan and may contain such additional provisions, including, without limitation, restrictions upon the exercise of the Option, as the Committee shall deem advisable.
12. Termination of Employment. In the event that the employment of an Optionee shall be terminated (otherwise by reason of death), such Option shall be exercisable (to the extent that such Option was exercisable at the time of termination of his employment) at any time prior to the expiration of a period of time not exceeding three months after such termination, but not more than ten years (five years in the case of an ISO granted to a 10% Holder) after the date on which such Option shall have been granted. Nothing in the Plan or in the Option Agreement shall confer upon an Optionee any right to be continued as an employee of the Corporation or its subsidiaries or interfere in any way with the right of the Corporation or any subsidiary to terminate or otherwise modify the terms of an Optionee’s employment, provided, however, that a change in an Optionee’s duties or position shall not affect such Optionee’s Option so long as such Optionee is still an employee of the Corporation or one of its subsidiaries.
13. Death of Optionee. In the event of the death of an Optionee, any unexercised portion of such Optionee’s Option shall be exercisable (to the extent that such Option was exercisable at the time of his death) at any time prior to the expiration of a period not exceeding three months after his death but not more than ten years (five years in the case of an ISO granted to a 10% Holder) after the date on which such Option shall have been granted and only by such
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person or persons to whom such deceased Optionee’s rights shall pass under such Optionee’s will or by the laws of descent and distribution.
14. Adjustments upon Changes in Capitalization. In the event of changes in the outstanding Stock of the Corporation by reason of stock dividends, splitups, recapitalizations, mergers, consolidations, combinations or exchanges of shares, separations, reorganizations or liquidations, (i) the maximum number of shares subject to the Plan pursuant to Paragraph 2 shall be correspondingly adjusted and (ii) the Exercise Price of, and the number and class of shares or the amount of cash or other assets or securities available upon the exercise of, any Option granted hereunder, shall be correspondingly adjusted, to the end that the Optionee’s proportionate interest in the Corporation, any successor thereto or in the cash, assets or other securities into which shares are converted or exchanged shall be maintained to the same extent, as near as may be practicable, as immediately before the occurrence of any such event. All references in this Plan to “Stock” from and after the occurrence of such event shall be deemed for all purposes of this Plan to refer to such other class of shares or securities issuable upon the exercise of Options granted pursuant hereto.
15. Stockholder and Stock Exchange Approval. This Plan is subject to and no Options shall be exercisable hereunder until after (i) the approval by the holders of a majority of the Stock of the Corporation voting at a duly held meeting of the stockholders of the Corporation within twelve months after the date of the adoption of the Plan by the Board, and (ii) the approval by the New York Stock Exchange, Inc. of a listing application covering the shares of Stock covered by this Plan.
16. Amendment of the Plan. The Board shall have complete power and authority to modify or amend the Plan (including the form of Option Agreement) from time to time in such respects as it shall deem advisable; provided, however, that the Board shall not, without the approval of the votes represented by a majority of the outstanding Stock of the Corporation present or represented at a meeting duly held in accordance with the applicable laws of the Corporation’s jurisdiction of incorporation and entitled to vote at a meeting of stockholders or by the written consent of stockholders owning stock representing a majority of the votes of the Corporation’s outstanding stock, (i) increase the maximum number of shares which in the aggregate are subject to Options under the Plan (except as provided by Paragraph 14), (ii) extend the term of the Plan or the period during which Options may be granted or exercised, (iii) reduce the Exercise Price in the case of ISOs below 100% (110% in the case of an ISO granted to a 10% Holder) of the fair market value of the Stock issuable upon exercise of Options at the time of the granting thereof, other than to change the manner of determining the fair market value thereof, (iv) modify the requirements as to eligibility for participation in the Plan, (v) with respect to options which are ISOs, amend the plan in any respect which would cause such options to no longer qualify for ISO treatment pursuant to the Internal Revenue Code, (vi) increase the maximum number of shares of Stock for which any employee may be granted Options under the Plan pursuant to Paragraph 6, (vii) materially increase the benefits accruing to participants under the Plan, or (viii) make any other change to the terms of the Plan which would require approval by the stockholders pursuant to the rules and regulations of the Securities and Exchange Commission or the listing standards and rules of the securities exchange on which the Stock is listed. No termination or amendment of the Plan shall, without the consent of the individual
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Optionee, adversely affect the rights of such Optionee under an Option theretofore granted to him or under such Optionee’s Option Agreement.
17. Taxes. The Corporation may make such provisions as it may deem appropriate for the withholding of any taxes which it determines is required in connection with any Options granted under the Plan. The Corporation may further require notification from the Optionees upon any disposition of Stock acquired pursuant to the exercise of Options granted hereunder.
18. Code References and Definitions. Whenever reference is made in this Plan to a section of the Internal Revenue Code, the reference shall be to said section as it is now in force or as it may hereafter be amended by any amendment which is applicable to this Plan. The term “subsidiary” shall have the meaning given to the term “subsidiary corporation” by Section 424(f) of the Internal Revenue Code. The terms “Incentive Stock Option” and “ISO” shall have the meanings given to them by Section 422 of the Internal Revenue Code. The term “10% Holder” shall mean any person who, for purposes of Section 422 of the Internal Revenue Code, owns more than 10% of the total combined voting power of all classes of stock of the employer corporation or of any subsidiary corporation.
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